US casino operator Bally’s Corp may have to withdraw from its multi-million-dollar rescue of Star Entertainment Group should the embattled Australian firm be hit with a massive fine by AML watchdog AUSTRAC.
Bally’s chairman Soo Kim made the revelation – since picked up by Australian media – during a video interview with Inside Asian Gaming published earlier this week, warning that the combined AU$300 million (US$195 million) package offered by his company and Bruce Mathieson’s Investment Holdings was contingent on Star being solvent. Shareholders of Star, which has stated that any fine of more than AU$100 million would jeopardize its ability to continue, approved the rescue deal last week.
According to the Bally’s chairman, any fine in the realm of the AU$450 million settlement agreed between AUSTRAC and Crown Resorts back in 2023 “would be a real problem”.
“One of the conditions precedent to our making the final investment and converting is that the company is solvent,” Kim said.
“We obviously got a solvency opinion based on what we thought were the facts at the time our deal was announced but if those facts change dramatically then the facts change dramatically.
“We are looking forward to getting involved and converting our debt to equity, exerting the influence that we believe this company needs to turn around, but there are scenarios where we are not going to be able to do that.”
Kim did, however, agree with a suggestion that AUSTRAC is not in the business of bankrupting companies, replying, “We’ve heard that too.”
IAG’s lengthy interview with Kim was conducted shortly after Star shareholders approved the rescue package but before it was revealed that Star’s Hong Kong partners had withdrawn from their own agreement to acquire the Australian casino giant’s 50% equity interest in its recently opened Queen’s Wharf Brisbane integrated resort development.
Asked about the prospect of keeping all three of Star’s casino assets in Sydney, the Gold Coast and Brisbane together, Kim explained that he would prefer a scenario where The Star Brisbane was not offloaded.
“If the company is able to get that deal done … we will support that but from our No.1 perspective we believe that these assets work together and the problems faced by one are faced by all three. We plan to solve those problems and we would like to manage Brisbane. We are prepared and moving forward with our own plan as if the assets are to be managed as a whole.”
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